Working Poor: Wage gap prevents Weld from keeping up with rest of state

JOSHUA POLSON/jpolson@greeleytribune.com
Antonio Rogers works next to a whiteboard with his motto Friday afternoon at Xerox Services, 244 Dundee Ave. in Greeley. Though he loves his new job, two years ago Rogers earned more than double what he takes home today.

JOSHUA POLSON/jpolson@greeleytribune.com
A few cubicles sit empty behind Antonio Rogers on Friday afternoon as he works at Xerox Services in Greeley. Rogers and about 1,000 other unemployed residents last year took jobs at new call centers in Greeley, which have proliferated because of its blue collar workforce.

Weld County 2012 earnings

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Every day just after 6 a.m., Antonio Rogers makes a mad dash to the bus stop to work for less than half the salary he made two years ago.

The 35-year-old father of six works at one of four call centers in Greeley that has brought more than 1,000 jobs in the last year, and has become a saving grace for many looking for full- and part-time work after the Great Recession left them without a steady paycheck. At $9-$11 an hour, they will likely not see better pay elsewhere in Greeley, considered a blue collar center of the state with its concentrations in manufacturing, agriculture, and oil and gas.

“I was making $25 an hour,” Rogers said of his job just two years ago as an assistant manager at a grocery store, which he gave up to take care of his dying father. “I’d been trying to get back to making that same amount of money, using the same qualifications and skills that got me that job, and I can’t get it anymore.”

Forty years ago, Weld County, also known as the Greeley Metropolitan Statistical Area, ranked third in the state in per capita income — it was nearly even with Boulder in 1973 and higher than Fort Collins.

Today, the Greeley area is dead last.

Hindsight is 20-20

A variety of events and decisions through the years have caused Weld wages to slip lower than the rest of the state’s metropolitan areas. Weld has a big hole from which to climb to get back to 1970s levels.

Leonard Wiest, a lifelong Greeley resident and former city manager, said at one point in the 1970s, $80 million was tucked away in Greeley banking deposits.

“In the ’70s, Greeley was the cat’s meow,” said Wiest, who was the city’s finance manager at the time. “It was growing good, there was good per capita income, revenue was good. Everything.”

The gas-rich Wattenberg field, over which much of Greeley sat, had been booming since its 1970 discovery, delivering about 1 million barrels of oil that year, and rising sharply to 6.5 million barrels by 1978. Gas production rose sharply, as well, from 1.9 million cubic-feet in 1970 to 64.7 million cubic-feet in 1978.

The Monfort meatpacking plant was one of the city’s highest-paying employers, along with Eastman Kodak in Windsor and State Farm in Evans, both employing many Greeley residents.

But other circumstances in the 1960s and ’70s hurt Greeley’s future prospects. Perhaps first and foremost was the Interstate 25 construction. It essentially bypassed Greeley, routing traffic away from what once was the center of northern Colorado commerce.

In 1979, a union strike at Monfort changed Greeley’s complexion, perhaps forever. The workers, making some of the highest industry wages with full health benefits, decided to strike, holding out for more money.

“I remembered the company was paying $12-$14 an hour to start,” said Kathy Egan, who owns Express Employment Professionals, 2711 10th St. in Greeley.

In 1980, Monfort shut down the plant for two years; 1,000 people were out of work. City sales tax revenue plummeted $800,000 in one year and suddenly, residents were $300,000 in arrears in their water bills. Weld’s per capita income took its first huge dip since 1970, falling to near the bottom of the state, resting only above Pueblo.

Egan was flooded with applications for general labor jobs.

“These guys were making the equivalent of $17-$18 an hour (at Monfort), when good labor jobs were $8 to $8.50 an hour,” she said.

That was followed by a series of ups and downs, but wages rarely spiked for the blue collar workforce.

Monfort re-opened in 1982, offering much lower wages. By then, Kodak employed 3,000 people; a good worker pool for higher tech jobs was set up.

In 1982, Anheuser-Busch had chosen a pristine site near the Poudre River in northwest Greeley to locate a manufacturing plant. Issues with the landowner releasing his mineral rights ultimately foiled the deal and the company opted to go to Fort Collins.

“They wanted to come to Greeley,” said former City Manager Pete Morrell, who now has a small business in downtown Greeley. “If it wouldn’t have been for Greeley, Budweiser wouldn’t have looked at northern Colorado.”

But Greeley’s fortunes changed again. In 1983, Hewlett-Packard, which had bought a sprawling acreage on 10th Street, opened a massive plant, eventually employing more than 1,000 people to build computers.

The mostly agricultural-based economy was indeed diversifying. Per capita income was back up past Pueblo and Grand Junction, growing 9.5 percent in 1983 and 1984, respectively.

While Greeley shared the same upward trajectory in per capita income with the rest of the state through the ’90s, the area’s growth wasn’t nearly as steep.

That was the decade of the tech boom. The Denver and Boulder areas grew by leaps and bounds over the rest of the state.

In the 1990s, Egan recruited for the packing plant, finding workers jobs there at $11-$12 an hour, she said.

Employers were reticent to increase wages.

“I think people pay what the market is,” said Jerry Wones, who was Greeley’s mayor from 1993-2000, helping to keep Pepsi Bottling in town, as well as Swift & Co. corporate headquarters (now JBS USA). “I think Greeley has a workforce that was somewhat used to lower wages, being ag-based, which was a lower wage. It just grew up that way.”

The forthcoming dot-com bust hurt per capita income throughout the state. After 18 years in Greeley, Electronic Fab Technology Corp., which made components for the computer and high-tech industry, closed its doors in 1999, leaving 210 people out of work; HP packed its bags in 2003, moving its remaining people to its Fort Collins plant. Greeley’s per capita income fell 2.2 percent that year.

That was essentially the last of the high-tech days for Greeley, as companies and startups congregated west of the interstate.

“Boulder is a high-tech market, and we’re a blue collar market,” Egan said. “We cut up cows, and they build medical equipment.”

From 2000 on, Greeley was one of the fastest growing areas in the country. Construction was booming, and people realized they could pay much less for a home in Greeley than the inflated prices in other northern Colorado cities. Population grew quickly. Businesses were growing and so was per capita income.

New Frontier Bank boasted annual growth for 10 years to become the biggest bank in the region by 2008. The next year, the bank failed, and the fallout of lost business in Greeley and Weld’s agriculture industry was huge. Per capita income plunged 6.7 percent in Weld.

The location of Leprino Foods, and its planned 500 jobs, into Greeley in recent years was seen as a savior. The city had found ways to lure companies in with its industrial water bank and making use of tax-increment financing districts. Leprino promised higher wages, and it delivered, offering upward of $13-$14 an hour for the lowest of skills. Other higher technology manufacturing had already come to the area with Owens Illinois and Vestas in Windsor.

The oil and gas industry began pouring into the area in 2010, and hasn’t let up since, bringing with it a host of new businesses ready to service them.

Egan said she works with four companies that need truck drivers. But there are plenty of transient workers who follow the boom cycles and many wonder just how many jobs they’re keeping out of the hands of locals.

Laramie Butters, 33, who is a single father of two daughters, owned his own business for 10 years driving his truck over the road. He quit that job two years ago at his wife’s request, only to watch her walk out the door of their six-bedroom Greeley home a month later. He found another job in Loveland, but he was laid off in November.

“In the past, if I had quit somewhere, especially driving a truck, I’d have a job in a couple of days,” Butters said. He spent the last three months looking for any work he could find and felt he could easily find a job driving trucks in the oil fields. He started making the rounds, but no one called back.

“I’ve got a million miles and the only thing on my record is a mudflap ticket,” Butters said. “Why are these guys not calling me? I applied to several. One, I called several times, and the man just kept saying, ‘I’ll call you in the next couple days.’ It’s been three weeks since I talked to him last.”

Butters got lucky, though, and he found a job in the last week working with Agfinity, an industry that fits his bachelor’s degree in agribusiness he earned at Michigan State. He expects to start this week — but he’ll only make a third of what he did driving his truck.

The Call Center cycle

The attraction of Greeley to the call center industry has been strong in recent years. In the last two years, upward of 1,500 call center jobs were announced to come to Greeley, with the addition of Xerox and Teletech. Afni and StarTek were experiencing growth and began bolstering their ranks. Wages ranged from $8-$10, then moved up slightly for some to up to $11 or possibly $12 an hour as competition for people heated up. That’s about the going rate for call center jobs throughout the nation, according to Salary.com .

“I know a couple of call centers that were looking at Greeley when I was involved in relocating their employees here,” Wiest said. “One of the things they insisted on was low wages. I guess that’s better than shipping those jobs to China.”

Jodi Hartmann, executive director of the Greeley Transitional House, which houses 12 homeless families and has been full for two years, said few of her clients can get anything more than call center work, which helps none of them get out of poverty.

“We’ve had great success getting clients jobs, but when you’re talking $9-$11 an hour, that’s not enough to bring you to self-sufficiency without relying on subsidies,” Hartmann said. “It’s just not a living wage.”

Hartmann said if the call centers, and frankly other minimum wage-paying jobs in Greeley, could bring their pay scales up to $15-$16 an hour, residents could begin to move off of assistance.

Stan Hoag, manager of Xerox Services, said he is always on the lookout to raise wages, but they’re dictated by what their clients pay. To compensate, the company holds monthly cookouts for employees, and Hoag himself often will make his staff a pancake breakfast.

Minimum wage rose 14 cents this year to $7.78 an hour in Colorado.

“The hardest thing for me here is everything else goes up but the wages,” said Rogers, who attended Aims Community College for radio broadcasting. “The cost of living goes up, the housing goes up, gas goes up. Who in their right mind at the state Capitol thinks a 14-cent adjustment will make someone’s life better?”

At his new call center job, Rogers is making much more than minimum wage, but still nowhere near his old wages, and he can’t afford housing. He and his family have been living at the Transitional House since October.

“My employer and my company have been really supportive. I love my job, but I’m torn,” he said. “We struggle and struggle. Some days I’ll be at work, and thank God my boss gives us pancakes in the morning.”

Jill Miller, 69, was laid off from her call center job three years ago after eight years with the company. She spent the next two years looking for work in Greeley and refused to work for minimum wage.

“It was frustrating. It was soul-destroying and not fun,” Miller said of her search. “I got some interviews. A local retail establishment offered me minimum wage, and got, shall we say, surprised when I said, ‘No, thank you.’ ... I suppose they figured with the job market being what it was, people would run over themselves” to fill the positions.

She held out for more and took a job at a new call center last August, which she loves.

But call center pay is unlikely to jump, unless more, or other like-paying industries, come in and put pressure on the labor supply, moving wages up. To some extent, that’s happened with the addition of Xerox and Teletech.

As long as there is a labor pool in Greeley that will take those jobs, the lower wage base will continue, Egan says.

“Most of those call centers were able to fill those jobs,” Egan said. “That means there is a worker pool in Greeley interested in those jobs. We interviewed five to six people a day with experience in call centers. We had no place to put them because for a long time, we only had one. Now, we have four, maybe five. … To me, that’s a healthy mix.”

How blue collar is Weld?

Weld’s history in agriculture set the framework for lower wages. Longtime employers in the ag industry have a bottom line they have to meet, and many point to the nation’s expectation of cheap food as a societal trend that is difficult to change.

“We’re competing with a lot of other (communities) and with the economy changing,” said assistant city manager Becky Safarik, “we can’t assume someone will come here and be willing to work for lower wages.”

Many see education as a key component, but many graduating from Greeley colleges are not sticking around because the high-level jobs are elsewhere.

“I interview a lot of college graduates, and the first thing they way is, ‘I need $15 an hour,’ ” to pay off their student loan debt, said Shannon Jantz, manager of Apple One, 2914 67th Ave., Suite 100 in west Greeley. “We end up losing candidates that could be great for companies here because they move to Boulder. They don’t want to take $10 an hour. They say, ‘I just spent four years in college, I still have all this debt… What did I go to school for?’ ”

Former Mayor Wones agreed the problem of retaining graduates needs to be addressed.

“If you went to Monfort School of Business and looked at their graduation class from December to last June, how many of them are still in Greeley?” Wones asked. “The number that stick around is tiny, even my own son. He had a degree in finance and computer science, but the jobs were not in Greeley other than being a bank teller.

“The real jobs were in south Denver or Boulder.”

But all agree that education is a major part of the equation. The percentage of educated people in the city of Greeley pales in comparison to other cities in the rest of the state, even though Greeley has a university and a community college.

The percentage of Greeley residents 25 and older with only a high school education in 2011 was the highest among the larger cities in the state at 26.7 percent, according to the U.S. Census Bureau’s American Community Survey.

Greeley had the second-lowest percentage in the state with the residents 25 and older with bachelor’s degrees, at 15.4 percent. In Fort Collins, 32.8 percent have bachelor’s degrees, and Boulder leads the state in both bachelor’s and graduate degrees at 36.7 percent and 39.5 percent, respectively. Greeley’s graduate degree rate was just 7.7 percent in Greeley, the survey revealed.

Eric Berglund, president and CEO of Upstate Colorado Economic Development, said high-tech industries tend to cluster together — around colleges for the talent pool.

“There is usually a synergy around a lot of those companies co-locating to each other,” Berglund said. If UNC, for example, had an engineering school, it could be likely the area could attract industries that need engineers.

The bigger research institutions have attracted federal labs and research and development, five of which are in Boulder, capitalizing on the University of Colorado. The Centers for Disease Control and Prevention has a facility in Fort Collins, near Colorado State University. Oil companies are working with the Colorado School of Mines in Golden to perfect technologies and practices relating to oil and gas drilling.

The patterns that drove industry growth have set up a formula in each area, with the labor pools woven into the fabric of those industries. That’s hard to change, given the chasm today between Boulder and Weld’s per capita income, although the strong growth the Weld economy is now experiencing is giving many hope for the future.

“Getting back up there is the tough economic development challenge these days,” said Martin Shields, an economics professor at Colorado State University. “The days of the $18-an-hour manufacturing jobs with good benefits are just harder to find. It’s not just a northern Colorado trend. The industries that are important to Weld County beyond agriculture, it’s just a global marketplace, and it’s keeping wages (lower).”